Document of The World Bank Report No: 58303 - MD RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MOLDOVA SOCIAL INVESTMENT FUND 2 PROJECT SWEDISH GRANT FOR SECOND ADDITIONAL FINANCING FEBRUARY 11, 2010 TO THE REPUBLIC OF MOLDOVA DECEMBER 8, 2010 Regional Vice President: Philippe Le Houerou Country Director: Martin Raiser Sector Manager / Acting Sector Director: Kathy Lindert/Mamta Murthi Task Team Leader: Menahem M. Prywes Yulia Smolyar 2 3 Restructuring Status: Draft Restructuring Type: Level two Last modified on date : 12/08/2010 1. Basic Information Project ID & Name P079314: SIF 2 Country Moldova Task Team Leader Menahem M. Prywes Sector Manager/Director Kathy A. Lindert Country Director Martin Raiser Original Board Approval Date 06/17/2004 Original Closing Date: 03/31/2010 Current Closing Date 03/31/2013 Proposed Closing Date [if applicable] EA Category F-Financial Intermediary Assessment Revised EA Category F-Financial Intermediary Assessment-Financial Intermediary Assessment EA Completion Date 09/25/2009 Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised BORR 1.53 1.53 COMM 3.74 3.73 IDA 20.00 20.00 SIDA 3.70 3.71 SORO 0.20 0.20 Total 29.17 29.17 3. Borrower Organization Department Location Republic of Moldova Moldova 4. Implementing Agency Organization Department Location Moldova Social Investment Fund Moldova (MSIF) 5. Disbursement Estimates (US$m) Actual amount disbursed as of 12/08/2010 25.45 Fiscal Year Annual Cumulative 2010 0.00 25.45 2011 1.10 26.55 2012 1.00 27.55 Total 27.55 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select N from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The project will contribute to the implementation of Moldova#s Economic Growth and Poverty Reduction Strategy by empowering poor communities and vulnerable population groups to manage their priority development needs. 7b. Revised Project Development Objectives/Outcomes [if applicable] 5 Reallocation of Proceeds ______________________________________________________________________ SWEDISH GRANT FOR SECOND ADDITIONAL FINANCING FOR THE MOLDOVA SOCIAL INVESTMENT FUND 2 PROJECT TF095950 Restructuring Paper 1. Proceeds for Swedish Grant for Second Additional Financing for the Moldova Social Investment Fund 2 Project TF095950 shall be reallocated as follows: Category of Expenditure Allocation % of Financing (expressed in EUR) Current Revised Current Revised (1) Goods, consultants' 739,322 330,322 100% 100% services and operating cost under the Project (2) (2) Sub-projects 1,073,210 1,482,210 100% 100% Total 1,812,532 1,812,532 100% 100% 2. Project status. The Swedish International Development Agency (Sida) made a grant of more than 1.8 million Euros to start preparation and implementation of labor intensive community works ahead of effectiveness of the Second Additional Financing for MSIF II. The Grant became effective on February 11, 2010 and will close at December 31, 2010, because of Sida`s requirement to disburse the funds within a year. Part of the Grant proceeds were originally allocated for architectural and engineering studies (Category 1) to prepare community infrastructure sub- projects which would be financed from the Second Additional Financing, after its effectiveness. Because of a long delay in launching the Second Additional Financing activities and the need to quickly disburse the Grant money, MSIF spent less than anticipated on architectural and engineering studies and more than anticipated on infrastructure sub-projects (Category 2). MSIF has already appraised and approved 26 sub-projects to be financed from the Grant proceeds, and the towns are currently implementing them. All these sub-projects are expected to be delivered by the Grant closing date of December 31, 2010. To date, the Grant has disbursed EUR1,539,171.47 and is expected to be closed with having almost all funds disbursed. 3. The proposed changes are made in response to request from the Government of Moldova to reallocate the grant proceeds between the two categories set forth in the 6 Grant Agreement. The reallocation is necessary as there are registered savings in Category 1 which the Government would like to re-allocate towards the needs of Category 2 to enable the MSIF to deliver more community infrastructure projects. These savings make up over 5 percent of the total grant amount; however, they do not imply any change in development objective or safeguards category and therefore are processed as level 2 restructuring. 7